Correlation Between LG Uplus and Itcen Co
Can any of the company-specific risk be diversified away by investing in both LG Uplus and Itcen Co at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining LG Uplus and Itcen Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LG Uplus and Itcen Co, you can compare the effects of market volatilities on LG Uplus and Itcen Co and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in LG Uplus with a short position of Itcen Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of LG Uplus and Itcen Co.
Diversification Opportunities for LG Uplus and Itcen Co
Excellent diversification
The 3 months correlation between 032640 and Itcen is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding LG Uplus and Itcen Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Itcen Co and LG Uplus is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on LG Uplus are associated (or correlated) with Itcen Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Itcen Co has no effect on the direction of LG Uplus i.e., LG Uplus and Itcen Co go up and down completely randomly.
Pair Corralation between LG Uplus and Itcen Co
Assuming the 90 days trading horizon LG Uplus is expected to generate 0.35 times more return on investment than Itcen Co. However, LG Uplus is 2.86 times less risky than Itcen Co. It trades about 0.15 of its potential returns per unit of risk. Itcen Co is currently generating about -0.04 per unit of risk. If you would invest 996,000 in LG Uplus on September 25, 2024 and sell it today you would earn a total of 100,000 from holding LG Uplus or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LG Uplus vs. Itcen Co
Performance |
| Timeline |
| LG Uplus |
| Itcen Co |
LG Uplus and Itcen Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LG Uplus and Itcen Co
The main advantage of trading using opposite LG Uplus and Itcen Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LG Uplus position performs unexpectedly, Itcen Co can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Itcen Co will offset losses from the drop in Itcen Co's long position.| LG Uplus vs. Samsung Electronics Co | LG Uplus vs. Samsung Electronics Co | LG Uplus vs. KB Financial Group | LG Uplus vs. Shinhan Financial Group |
| Itcen Co vs. Air Busan Co | Itcen Co vs. Hanjin Transportation Co | Itcen Co vs. Nam Hwa Construction | Itcen Co vs. Kyeryong Construction Industrial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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